1. Word Processor

When you want to create a printable document, word processors (like MS Word or LibreOffice Writer) sound like an obvious choice.

Benefits

You are most likely already using it

Good formatting, branding and printing capabilities

Disadvantages

It's a nightmare to prepare

It's an even worse nightmare to maintain

2. Spreadsheet

A slightly better choice for a tool would be a spreadsheet (like MS Excel or LibreOffice Calc). It makes navigating, searching and filtering data more convenient. It also feels more natural since documentation usually has tabular structure.

4. Database Documentation Generators (Read Only)

There is a number of dedicated tools whose sole purpose is to generate documentation from your database schema. This category of tools doesn't have any editing capabilities and can only generate a documentation from metadata extracted from the database.

Benefits

Easy to use

Better formatting than standard database tools

Disadvantages

No editing capabilities, separate tool is required for this (e.g. database management tool)

5. Database Documentation Tools (Read/Write)

There is a number of tools that enable you to do both functions of documenting:

describe tables and columns (data dictionary), or other database objects and

generate convenient documents for sharing.

This category is different from the previous in editing capabilities which is a huge difference as providing the descriptions is a key documentation activity. This is where value added is being created. Document generation just makes it easier to access and share, while providing descriptions of data structures gets the knowledge out of the peoples heads and saves it for later reference.

Those tools mostly store metadata (descriptions) in the database itself - in Extended Properties in the case of SQL Server or comments in the case of MySQL and Oracle.

There are tools that go beyond extended property/comment editors and documentation generators - let's call them metadata repositories. Those tools keep data in a separate repository which enables them to gather and store much more metadata and makes them independent on the database platform. They provide more functionalities: advanced authoring, more metadata, database diagrams.

7. Data Modeling Tools

There is a large category of tools which are designed specifically for logical and physical engine-independent data modeling. They provide forward and reverse engineering functionalities. They are good for creating ER Diagrams, but much less for describing data elements (creating Data Dictionaries). Even worse at the maintenance of the documentation.

Benefits

Global repository

Rich metadata

Better authoring capabilities

Support more than one

Support for multiple database engines

Disadvantages

Very complicated and overloaded with features

Designed for forward engineering purposes, not really ideal for reverse engineering